A bill would fix an outdated provision in the tax code, reducing the cost of health care for the self-employed.
The measure would end the FICA tax on health insurance premiums for the self-employed, thereby leveling the playing field. Congressman Ron Kind says the bill (HR 1470) ends discrimination.
"There's an anomaly in the tax code that's existed for too long that discriminates against self-employed individuals throughout the country. And you're talking about 21.3 million self-employed individuals nationwide – over 340,000 of whom are in my home state of Wisconsin alone."
The cosponsor of the legislation explains under current tax code, corporations can deduct the cost of health insurance premiums as a business expense, but self-employed workers cannot, which means they're paying an additional 15.3 percent tax on those premiums.
"We found that by doing this – making this correction to the tax code it could save on average roughly 1850 per self-employed individual in the nation. And this is money that could be pumped back into their businesses."
Kind admits it'll cost money to make the change — roughly 9.8 billion over five years.
Bill Raisch, with the National Federation of Independent Business loves the idea.
"This bipartisan legislation is such an important issue for the NFIB because it hits at what are two of the top issues for our members which are health care and taxes. This is a good one because it gets at both."
NOTE. It's being called the Equity for Our Nation's Self-Employed Act of 2009 corrects.